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So according to CPUz, my processor is running at half speed. It's an Athlon Neo MV-40. It's supposed to be clocked at 1.6GHz, but it's only running at 800MHz. Any idea what can be causing this, or how I can go about fixing it?

If it is not due to power saving mode settings, check your bios for improperly set FSB (front side bus) speed or cpu clock multiplier settings, possibly look at jumpers on the motherboard if it's a really old setup instead of bios settings. If both are OK, you just have a bad motherboard.

For others reading: yes, that can happen b/c my original ASUS M3A79-T Deluxe MoBo was bad and would never change from the x4 multiplier... replacement had something screwed up dealing with the northbridge, and third finally worked at spec.

Modern processors will automatically downclock themselves in order to save power and make less heat.

If you do something that needs the full power, it will automatically step up to full speed.

Run something CPU-intensive like a video converter and check the speed again.

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Rydian wins again. This is a netbook computer, it's designed for light-weight things like basic internet, e-mail, and word processing.
Moose3, you are aware that this is an ultra-thin netbook? To check the motherboard he would have to take the entire system apart,
which for a netbook, is by no means an easy task.

My i7-720QM is the same way, it's normal operating frequency is rated at 1.6 Ghz. Currently, as I type this post it's running at around
600-800 Mhz. I'm not sure what this technology is called for AMD, but for Intel it's known as "Turbo-Boost". Underclocking in this
situation is definitely advantageous. It's a 65nm processor, so it is comparable to the average laptop-notebook's battery life, which
makes running it at sub-1.6ghz frequencies quite a good, well thought out idea. This processor also supports Vista/HD playback.

I think Rydian's answer is much more likely - SpeedFan is useful in that it shows you the running speeds of the CPU cores. When idle, they clock down by as much as 70% (that I've observed), yet when it's active again it only takes a few seconds to get back to normal clocks.

Power Saving mode (as mkoo said) also causes a 10% or so downclock, depending on the settings applies to power options. Putting it on Maximum Performance will only keep it at maximum clock, but that's the only real difference between it and Balanced (based on Vista's naming - 7 likes to hide at least one of those settings sometimes). EDIT: Worth noting, there are also many applications that change clock frequencies on the fly, but they're just advanced versions of Windows power profiles.

It's unlikely for the hardware settings to be incorrect unless someone's been messing around with BIOS, but it's not unheard of (I've dealt with many such cases over the years). Typically resetting BIOS to defaults will fix that problem if it exists. @moose3, your case of crippled motherboards is extremely rare (going by statistics at least) and I've only encountered it once - in a laptop. Bad luck on your part or, more likely, bad dealers/resellers.

EDIT2: @Raven, taking apart a netbook can be easy, if you're careful and observant. It's just not recommended to anyone without experience in laptops and confidence in electronics, because it's also just as easy to screw something up ;p